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Technology Stocks : SDL, Inc. [Nasdaq: SDLI] -- Ignore unavailable to you. Want to Upgrade?

To: jay silberman who wrote (370)	7/31/1999 2:36:00 AM
From: pat mudge	Read Replies (1) \| Respond to of 3951

Jay -- I understand your feelings regarding the market. Usually by the time I figure out a pattern, it changes. I'm staying long as I've been sorry every time I've taken profits. Here's the Q&A I promised: Q: Will the 10 gig rival 980 nm pumps? A: It's a new product. The 1999 market is in the range of $100 million and has high growth potential. Q: What are percentages for undersea and what are opportunities with Tyco? A: Above 10% (10 to 15). Can't comment on customers or potential customers. Q: What are opportunities with Japanese? A: I believe we have best chip. Desired by all operators. People need high power with stabilization. Q: What will submarine percentage be in 2000? A: 25% or better. Q: Capacity for 980nm was 150,000 run rate. Is it on track? A: Yes, on track Q: Are you running at capacity now? A: Yes. And hope to increase in 2000. Q: Were Lucent delays made up in other areas? A: Don't comment on particular customers. Submarine market came in strong in Q2. Undersea demand is more than we can produce. Wafer production ramping as fast as we can. We could have sold more. Q: CATV/cable --- how's it going? A: Market is strong. It's around 5% of business. But will continue to be strong. Q: Geographic breakdown? A: Europe was strong --- 29% of revenues, triple prior year. Q: What's growth in second half? Especially DWDM growth in Q3? A: Seeing it (second half) up 35% or greater, weighted to 4Q. See new programs ramping in Q3 and more in Q4. Q: Market share in 10 gig? A: We'd like 20% in next 12 mos. Q: What about 40 gig? A: We're focused on 10 gig now --- would rather not comment on 40 gig. Q: Will IOC contribute to operating profits? A: Definitely in Q4 --- maybe in Q3. Q: What's driving Europe? A: DWDM, 980 pump modules and submarine chips. Q: Any chanages to European operations? A: Consolidating IOC. They're adding facilities and ramping production. Q: How many customers from IOC? A: 5 to 10. Q: 1480 update? A: Introducing 1455 nm for Raman (?). Seeing interest from submarine and potentially terrestrial. Very excited about opprotunities. Q: Pricing trrends in 980? A: Strong and firm. We command premium prices b/c of quality. Working on 1550. Q: Undersea capacity constrained --- are you losing customers? A: Undersea qualifies one source for each product. They want us to ramp fast. Q: Other customers? A: Seeing purchase orders from second customer --- we have agreement --- and we're trying to ramp for Q4. A third customer working on qualification. Q: Gross margins, are you comfortable? A: They continue to improve. Customer demand is based on technology. Q: Moving to new qualifications? A: Terrestrial side we're already qualified by most of significant customers. Opportunities for gaining new customers is small b/c we sell to all the major ones already. Undersea market has huge growth potential. Excellent demand. Q: Any other capacity constraints? A: 10 gig light modulators --- we're ramping in UK. Q: Acquisitions? A: Continue to look. Q: Why DWDM weighted to Q4? A: B/c we're ramping undersea and 10 gig --- we're scrambling to add manufacturing. Q: How long will growth continue? A: Not at a factor of 3 (as just experienced) --- second half 35%. Q: timing of 1/2 watt, when shipping? A: 1Q 2000. 1 watt chip still being tested --- 2001 product intro. Q: Ideas regarding acquisitions? A: We look for variety --- would like to broaden in fiber optic telecommunications. Look at technology and financials. Q: Percentage for terrestrial pump growth? A: 40%. --- 10 gig will be good in 2000. Q: Overall growth? A: 2000 will be stronger than we projected 3 months ago. 10 gig and undersea are strong. 50% is doable --- could be greater.